'VAT to return when food price inflation goes down'
Food free from Value Added Tax (VAT) is a short-term measure to bring relief to consumers and will be reimposed when the food inflation decreases and there is more food security, says Food Production Minister Devant Maharaj.
Maharaj was speaking yesterday at the launch of an initiative geared toward greening the poultry sector at the Marriott Courtyard Hotel, Invaders Bay, Port of Spain.
Prime Minister Kamla Persad-Bissessar, at the People's Partnership pre-budget rally last Saturday, announced that VAT would be removed from food items as a short-term measure to deal with high food prices.
"She (the Prime Minister) and (Finance) Minister (Larry) Howai also said that it will be a temporary measure, as we address the issue of food security. The measure is being linked to the ability of the nation to be food-secure. So I would assume that once we achieve some degree of food security and food inflation comes down, then it will be revisited at that time," Maharaj said yesterday.
Asked if there was any particular timeframe set for the lifting of the VAT-free items, Maharaj said, "I think misinformation is being spread as if to say that the VAT just removed will be reimposed in six months. That is the furthest from the truth."
The Food Production Ministry, said Maharaj, is working to ensure more food is grown locally, in an effort to reduce the food import bill.
"In anticipation of the global impact of the drought affecting the US agro-economy, the Ministry of Food Production embarked on a series of initiatives geared towards reducing the nation's food import bill, increasing national food and nutrition security, while seeking to reduce headline inflation, which is fuelled by food price inflation," he said.
He disclosed the Ministry is concluding the design of a National Food Security Intervention Initiative, which incorporates the planting of 1,000 acres of corn to aid in stabilising the domestic poultry and livestock markets.
Maharaj said the Ministry is also exploring non-traditional areas for food stock. Normally, corn and feed stock are sourced from North American markets, but markets in South and Central America are now being considered.